Petratherm updates on its efforts in Madrid and Tenerife in Spain

Australian Petratherm updates on its activities in Spain, saying it will submit an application for government grants for its projecs in the country. It has progressed its Madrid Geothermal District Heating project and pushes forward on its geothermal power project in Tenerife with its 50% partner Enel Green Power.

In an update on its Spanish activities, Australian Petratherm informs about its geothermal district heating project in Madrid, as well as its geothermal power project in Tenerife.

The company informs that, “submissions are now being sought by the Spanish federal government for geothermal energy projects. Both the Tenerife and Madrid projects are eligible and represent the two most advanced geothermal projects in Spain.

Tenerife conventional volcanic project

Petratherm España in conjunction with its 50% partner, Enel Green Power (EGP), continued to develop the Tenerife volcanic geothermal project. Three prospective drilling targets have been under consideration with a recent review of long term development potential indicating sites in the eastern and southern tenements being more attractive.

Work is underway with EGP to finalize the drilling target and costs for a slim-hole exploratory well. Concurrently, a preliminary design and cost for a deep production well is being assessed.

Tenerife provides a major opportunity to build a conventional geothermal project. The island has a permanent population in excess of one million that can increase to 1.5 million during peak tourist season – placing a large demand on peak power generation, in excess of 800 MW. The island also has substantial transmission infrastructure close to Petratherm España’s exploration licenses.

Importantly, the island’s current primary source of power generation is based on imported diesel resulting in very high priced electricity (above AUD $140/MWh and potentially as high as $240/MWh) with a significant carbon signature. The Tenerife project is aimed at displacing and/or avoiding the island’s reliance on imported fuel sources while concurrently reducing the island’s carbon footprint.

The potential for a high temperature hydrothermal source in excess of 240oC coupled with high electricity prices makes the Tenerife project commercially attractive.

Conventional volcanic based geothermal projects are commercially established in many parts of the world accounting for more than 10,000 MW of installed power generation capacity – more than three times the peak demand of the state of South Australia.

The strong commercial potential of the Tenerife project has resulted in Petratherm España and EGP being approached by three different companies seeking JV participation in the project.

Petratherm and EGP have commenced initial discussions with those parties to determine the optimal additional JV partner for the project.

Madrid District Heating Project

Petratherm España has progressed its Madrid Geothermal District Heating (GDH) project under the Cooperative Agreement with the Spanish federal and Madrid regional governments.

Petratherm España has completed the final design of the GDH project and is engaged in discussions with a major European utility to assess joint venture arrangements.”